Zeetta Networks Limited - Period Ending 2020-12-31

ZEETTA NETWORKS LIMITED - Company Information

Zeetta Networks Limited 09396517 false 2020-01-01 2020-12-31 2020-12-31 The principal activity of the company is the provision of Open Networking technologies, with pioneering solutions based on Software Defined Networking (SDN) and Network Visualisation (NV). Digita Accounts Production Advanced 6.29.9459.0 true true 09396517 2020-01-01 2020-12-31 09396517 2020-12-31 09396517 bus:OrdinaryShareClass1 2020-12-31 09396517 bus:OrdinaryShareClass2 2020-12-31 09396517 core:CurrentFinancialInstruments 2020-12-31 09396517 core:CurrentFinancialInstruments core:WithinOneYear 2020-12-31 09396517 core:Non-currentFinancialInstruments core:AfterOneYear 2020-12-31 09396517 core:WithinOneYear 2020-12-31 09396517 core:FurnitureFittingsToolsEquipment 2020-12-31 09396517 core:MotorVehicles 2020-12-31 09396517 bus:SmallEntities 2020-01-01 2020-12-31 09396517 bus:Audited 2020-01-01 2020-12-31 09396517 bus:FullAccounts 2020-01-01 2020-12-31 09396517 bus:SmallCompaniesRegimeForAccounts 2020-01-01 2020-12-31 09396517 bus:RegisteredOffice 2020-01-01 2020-12-31 09396517 bus:Director4 2020-01-01 2020-12-31 09396517 bus:Director7 2020-01-01 2020-12-31 09396517 bus:Director8 2020-01-01 2020-12-31 09396517 bus:OrdinaryShareClass1 2020-01-01 2020-12-31 09396517 bus:OrdinaryShareClass2 2020-01-01 2020-12-31 09396517 bus:PrivateLimitedCompanyLtd 2020-01-01 2020-12-31 09396517 core:ComputerEquipment 2020-01-01 2020-12-31 09396517 core:FurnitureFittings 2020-01-01 2020-12-31 09396517 core:FurnitureFittingsToolsEquipment 2020-01-01 2020-12-31 09396517 core:MotorVehicles 2020-01-01 2020-12-31 09396517 1 2020-01-01 2020-12-31 09396517 countries:AllCountries 2020-01-01 2020-12-31 09396517 2019-12-31 09396517 core:FurnitureFittingsToolsEquipment 2019-12-31 09396517 core:MotorVehicles 2019-12-31 09396517 2019-01-01 2019-12-31 09396517 2019-12-31 09396517 bus:OrdinaryShareClass1 2019-12-31 09396517 bus:OrdinaryShareClass2 2019-12-31 09396517 core:CurrentFinancialInstruments 2019-12-31 09396517 core:CurrentFinancialInstruments core:WithinOneYear 2019-12-31 09396517 core:Non-currentFinancialInstruments core:AfterOneYear 2019-12-31 09396517 core:WithinOneYear 2019-12-31 09396517 core:FurnitureFittingsToolsEquipment 2019-12-31 09396517 core:MotorVehicles 2019-12-31 iso4217:GBP xbrli:pure xbrli:shares

Registration number: 09396517

Zeetta Networks Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2020

Pages for filing with Registrar

Zeetta Networks Limited

Contents

Company Information	1
Statement of Directors' Responsibilities	2
Balance Sheet	3 to 4
Notes to the Financial Statements	5 to 14

Zeetta Networks Limited

Company Information

Directors

I T Jenks

Bloc Ventures Directors Limited

I Mahna

Registered office

First Floor
Templeback
10 Temple Back
Bristol
BS1 6FL

Registered number

09396517

Auditors

Corrigan Accountants Limited
The Tramshed
25 Lower Park Row
Bristol
BS1 5BN

Zeetta Networks Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•	select suitable accounting policies and apply them consistently;

•	make judgements and accounting estimates that are reasonable and prudent;

•	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Zeetta Networks Limited

(Registration number: 09396517)
Balance Sheet as at 31 December 2020

	Note	2020 £	2019 £
Fixed assets
Tangible assets	4	18,599	60,471
Current assets
Debtors	5	834,849	256,854
Cash at bank and in hand		287,491	276,015
		1,122,340	532,869
Creditors: Amounts falling due within one year	6	(861,028)	(658,657)
Net current assets/(liabilities)		261,312	(125,788)
Total assets less current liabilities		279,911	(65,317)
Creditors: Amounts falling due after more than one year	6	(2,050,000)	(500,000)
Net liabilities		(1,770,089)	(565,317)
Capital and reserves
Called up share capital		32	32
Share premium reserve		2,784,749	2,784,749
Other reserves		188,025	218,168
Profit and loss account		(4,742,895)	(3,568,266)
Total equity		(1,770,089)	(565,317)

Zeetta Networks Limited

(Registration number: 09396517)
Balance Sheet as at 31 December 2020

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised for issue by the Board on 10 February 2022 and signed on its behalf by:

.........................................

I Mahna

Director

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

1	Statutory information

The company is incorporated in England and Wales.

The address of its registered office is:
First Floor Templeback
10 Temple Back
Bristol
BS1 6FLUnited Kingdom

2	Accounting policies

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.

Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented.

Basis of preparation

These financial statements have been prepared using the historical cost convention.

The financial statements are prepared in pounds sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

The company was loss-making in the financial year and had net liabilities as at the year-end. As part of its going concern assessment the Board has therefore prepared cashflow projections covering the period of twelve months from the approval of these financial statements.

The Board’s cashflow projections show that the company will be able to meet its liabilities as they fall due. However, those projections assume that the company will raise further equity funds within the twelve month period from the date of approval of these financial statements. While that fundraising process has begun, and the Board believes the fundraising will be successful, the uncertain nature of any fundraising of this type means that there is a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

2	Accounting policies (continued)

Based on discussions with current shareholders, and funds already raised since the year-end (see note 11), the directors believe the planned fundraising will raise sufficient funds and therefore they have a reasonable expectation that the company will have adequate resources to continue in operation for the next twelve months. Accordingly, the financial statements have been prepared on a going concern basis.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and the provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured; and
it is probable that future economic benefits will flow to the entity.

Government grants

Government grants are recognised based on the performance against the conditions in the grant taking due consideration of the time expected to complete the work. Judgement is exercised in assessing the stage of completion and the expected level of work required to complete the project.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into sterling at the rates prevailing on the reporting period date. Exchange gains and losses are taken to profit and loss and classified within administrative expenses.

Tax

The tax expense or credit for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.

Tangible fixed assets

Tangible fixed assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation.

The cost of tangible fixed assets includes directly attributable incremental costs incurred in their acquisition and installation.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

2	Accounting policies (continued)

Depreciation is charged so as to write off the cost of assets evenly over their estimated useful lives, as follows:

	Depreciation method and rate
Computer equipment	33% on cost
Furniture and fittings	33% on cost

Research and development costs

Research and development costs are written off to profit or loss in the year incurred.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits.

Trade debtors

Trade debtors are recognised initially at the transaction price. They are subsequently measured less any provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors

Trade creditors are recognised at the transaction price.

Borrowings

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements. For convertible loan notes, the net proceeds received from the issue of the notes are split between a liability element and an equity component at the date of issue.

Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently, they are measured at amortised cost using the effective interest rate method. The interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

2	Accounting policies (continued)

Assets held under hire purchase arrangements are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments or receipts are apportioned between finance costs or income (as applicable) in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability or debtor.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as an employee benefit expense when they are due.

Share based payments

The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the awards. The fair value of the awards granted is measured using the Black Scholes method and is based on company specific observable market data, taking into account the terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date.

As permitted by FRS102, these financial statements do not include any expense for share options which were issued prior to the period in which FRS102 was adopted for the first time (i.e. prior to 1 August 2016).

Employee benefits
The costs of short-term employee benefits , including the cost of any unused holiday entitlement, are recognised in the period in which the employees' services are received.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

3	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 26 (2019 - 30).

4	Tangible fixed assets

	Computer equipment £	Furniture and fittings £	Total £
Cost
At 1 January 2020	143,438	9,553	152,991
Disposals	-	(150)	(150)
At 31 December 2020	143,438	9,403	152,841
Depreciation
At 1 January 2020	85,527	6,993	92,520
Charge for the year	39,618	2,235	41,853
Eliminated on disposal	-	(131)	(131)
At 31 December 2020	125,145	9,097	134,242
Carrying amount
At 31 December 2020	18,293	306	18,599
At 31 December 2019	57,911	2,560	60,471

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

5	Debtors: amounts falling due within one year

	2020 £	2019 £
Trade debtors	53,577	-
Prepayments and accrued income	498,684	37,216
Other debtors	61,518	41,143
Corporation tax	221,070	178,495
	834,849	256,854

Creditors

	Note	2020 £	2019 £
Amounts falling due within one year
Hire purchase liabilities		1,776	8,305
Trade creditors		110,828	66,428
Social security and other taxes		73,130	41,770
Other creditors		324,870	13,446
Accruals and deferred income		350,424	528,708
		861,028	658,657
Due after one year
Loans and borrowings		2,050,000	500,000

Hire purchase liabilities
The hire purchase liabilities are secured against the assets to which they relate.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

6	Creditors (continued)

Loans and borrowings
Most of the Loans and borrowings balance represent three tranches of convertible loan notes which total £2m. The note for £500,000 issued in 2019 bears interest at a rate of 1% per month. During 2020, notes were issued for £500,000 and £1m which bear interest at 1% per month and 12% per annum respectively.

7	Share capital

Allotted, called up and fully paid shares

	2020		2019
	No.	£	No.	£
Ordinary shares of £0.0001 each	107,698	11	107,698	11
Preference shares of £0.0001 each	211,456	21	211,456	21
	319,154	32	319,154	32

8	Obligations under leases

Operating leases

The total of future minimum lease payments under non-cancellable operating leases is as follows:

	2020 £	2019 £
Total	47,000	108,000

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

9	Share-based payments

EMI Scheme

Share options have been granted to certain employees under an EMI share options scheme. The weighted average exercise price of the brought forward options is £0.63. No options were issued in the year. The options are exercisable provided criteria are met regarding continued employment and achievement of certain targets.

The movements in the number of share options during the year were as follows:

	2020 Number	2019 Number
Outstanding, start of period	28,076	24,720
Granted during the period	-	8,421
Forfeited during the period	(12,566)	(5,065)
Outstanding, end of period	15,510	28,076
Exercisable, end of period	11,695	13,359

The movements in the weighted average exercise price of share options during the year were as follows:

	2020	2019
	£	£
Outstanding, start of period	0.63	0.86
Granted during the period	-	0.0001
Forfeited or lapsed during the period	0.56	-
Outstanding, end of period	0.63	0.63
Exercisable, end of period	1.50	1.65

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

9	Share-based payments (continued)

Unapproved Scheme

Share options have been granted to certain employees under an unapproved share option scheme. The exercise price of the brought forward options is £2.95. No options were issued in the year. The options are exercisable provided certain criteria are met regarding continued employment and the achievement of certain targets.

The movements in the number of share options during the year were as follows:

	2020 Number	2019 Number
Outstanding, start of period	19,196	18,260
Granted during the period	-	936
Outstanding, end of period	19,196	19,196
Exercisable, end of period	11,432	9,059

The movements in the weighted average exercise price of share options during the year were as follows:

	2020 £	2019 £
Outstanding, start of period	2.95	3.11
Outstanding, end of period	2.95	2.95
Exercisable, end of period	0.20	6.26

As permitted by FRS102, these financial statements do not include any expense for the options granted prior to the period in which FRS102 was adopted for the first time.

10	Related party transactions

Included with Loans and Borrowings, and accruals, are amounts of £1.5m and £156,233 respectively owed to a shareholder. The latter amount relates to accrued but unpaid loan interest. Of the principal of £1.5m, £1m was issued during the year under review. £1,000,000 was converted into equity on 31 March 2021.

Zeetta Networks Limited

Notes to the Financial Statements for the Year Ended 31 December 2020

11	Post balance sheet events

On 26 February 2021 the company issued £640,000 of convertible notes to existing shareholders. The consideration was cash of £500,000 and the settlement of £140,000 of liabilities owed to those shareholders.

On 31 March 2021 the company issued 70,345 new preference shares for a total consideration of £1,157,151, representing the conversion of earlier loan notes and unpaid interest relating to those notes.

On 28 October 2021 the company raised £1,000,000 of cash following the issue of convertible loan notes to an existing shareholder.

12	Audit report

The Independent Auditor's Report was unqualified and modified to include the following statement:

Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the company plans to raise further equity funds within the next 12 months. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The name of the Senior Statutory Auditor who signed the audit report on 10 February 2022 was Stuart Crisp BSc FCA. The auditor was Corrigan Accountants Limited.